Protecting Your Property Through Wills and Tenancy in Common
When we pass away, we usually want our children to inherit the properties we have worked to pay for during our adult lives. Many people are under the impression that this will automatically happen in the event of their death as long as they have a will which expressly wishes this to be the case, but unfortunately, there are several reasons why this won’t always happen.
For that reason, one of the most important things that you can do to ensure that your children or loved ones stand to inherit is to set up an agreement which names you as a Tenant in Common if you own a property with another person.
Why Would My Children Not Automatically Inherit My House?
When two people buy a house together, they usually immediately become Joint Tenants of that property, entitling them each to 100% ownership. If one partner happens to pass away, the other will automatically inherit the entirety of the house.
The issue arises when the surviving partner decides to remarry, as their new partner will then automatically obtain rights to that property which could see the children of the surviving partner or the intended beneficiaries of the house lose out.
What Are Tenants in Common?
Becoming Tenants in Common and changing the title on your property deeds will allow you to assign a percentage ownership between yourself and the person you own the property with. Each party is then able to protect this percentage and leave it in their will to the people they choose to as desired, as soon as the probate process is complete.
In the event of either partner dying, the surviving partner would only be entitled to the agreed percentage of the property with the remainder being protected for the intended beneficiaries.
Other Points for Consideration
There are several other reasons why specifying a Tenancy in Common is desirable which include;
* Protecting the asset against being used for care fees due to illness. The value of any property owned is considered before a Local Authority will provide help if either partner needs an element of care in old age.
* If the couple who own the property are unmarried, being Tenants in Common can reduce the amount of inheritance tax which will become due in the event of death.
A Tenancy in Common agreement has the ability to prevent your property being used to pay for care fees and is also an attractive way to limit the amount of inheritance tax your named beneficiaries will be liable to pay. Appointing powers of attorney could also provide a way for you to ensure that your assets are handled in accordance with your wishes should both you and your partner be approaching old age.
In addition, the formation of a Trust is another way to ensure that your assets are protected and ringfenced for those who you wish to benefit. A Discretionary Trust can be combined with both a will and with a Tenancy in Common agreement.
Review Your Tenancy Agreement
If you currently own a home with a partner you are married to or otherwise, we would suggest getting in touch with our team of professional consultants so that we can provide advice on your situation. To make use of our services, call Heritage Wills on 01603 894500 for more information or personalised advice.